Builders have become more eager to offer prospective home buyers incentives— including more affordable rate buy-downs, reduced closing costs and free amenities—as mortgage rates soared to a 22-year high last quarter and more homes emerged on the market.
Ryan Marshall, president and CEO of home construction company PulteGroup Inc., said during a second-quarter earnings call that a majority of incentives offered are longer-term mortgage rate locks or rate buy-downs–or when the buyer pays more upfront for a lower interest rate–noting “many of today’s home buyers can still afford the price of a new home,” but some need help affording mortgage rates.
Kimberly Mackey, founder of New Homes Solutions, says sales representatives are eager to provide buyers with “as much as possible” while giving “something like a refrigerator … or blinds, or something along those lines, to incentivize a buyer” to move quickly on purchasing a home.
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